The FTSE fell 0.35% as investors await news on today’s EU summit in which PM Theresa May will seek to extend the deadline on Brexit. The problem however has proven to be a lack of direction rather than a lack of time on the Brexit front. Out of the UK, global trade uncertainty escalates as the EU now faces a threat of tariffs from the US delivered by President Trump’s tweet on Tuesday. In addition to that, the IMF downgraded its global growth forecast from 3.5% to 3.3% which further dampens the outlook on the global economy. On today’s data front, The UK publish fresh GDP figures and manufacturing production data which are estimated to be lower. Apart from Brexit developments, the effect of the economic results on the domestic currency may influence price action on the FTSE as the internationally exposed index benefits from a lower pound.
While the FTSE extended its decline towards support at 11420, it managed to close above it at 7425 on Tuesday. The FTSE should pause its uptrend should support at 11420 hold. However, a decline below the 11420 level coinciding with the 20-period MA will bring into view support at 11370. Unless we break below this level, a continuation of the uptrend should follow.
Support: 7420/ 7390
Resistance: 7440/ 7470